2 AbstractSome have felt personal finance was just about them, about money, a temporal matter, not required for spiritual growth, and separate from the gospel of Jesus Christ. These and other myths abound that are not only wrong, but detrimental to your financial and spiritual health. The reality is that personal finance is simply part of the gospel of Jesus Christ and is an important part of this life experience here on earth. Individuals who have not fallen for these myths have learned important habits that have helped them become wiser financial stewards and better prepared for the inevitable challenges and storms of life ahead. They have learned what “wise stewards know.”

7 Ten Myths of Personal FinanceMyth 1: The Gospel is Hard and ExpensiveMyth 2: Life Revolves Around MeMyth 3: It’s About MoneyMyth 4: It’s All MineMyth 5: Finances are a Temporal MatterMyth 6: Finance is a Man’s ResponsibilityMyth 7: Consumer and Credit Card Debt is OKMyth 8: Budgets are for College StudentsMyth 9: I can start getting out of debt and saving laterMyth 10: I Pay Tithing, I Have Nothing to Worry About

8 Myth 1. Living the Gospel is HardSome have felt that ‘living the gospel” is hard, that it is too much work and too expensiveThey think life would be easier without:The need to obey the commandmentsThe need to share with othersThe need to pay tithes and offeringsThe need to do their visiting and home teachingThe need to serve and work in the churchThe reality is different

9 Reality 1. Life is hard (but the gospel makes it easier)Life is what’s hardIt is making decisions, growing up, overcoming challenges, earning a living, raising children, etc.But the truth of the gospel makes us free:Free from the enticements of the world to forsake all in search of pleasure, pay, power, and prestigeFree from addictions including illegal drugs, pornography, tobacco, alcohol, and debtFree to make choices and change consistent with who we truly are, children of GodFree to be our best self with a correct vision of who we really are and who we can become

10 Life is Hard (continued)In fact, living the gospel is very cost effectiveWhile you do pay tithes and offerings:You live on a budget and live within your meansYou earn interest instead of paying itYou know your goals, spend money only on things that you value, and learn to get by on lessYou do not waste money on addictive behaviors including debt and interest costsYou do not try to keep up with the neighborsYou spend less money on food as you buy less processed food and more fruits and vegetablesYou exercise so you spend less on medical costs

11 Myth 2. Life Revolves Around MeSome believe the statement “it’s all about me”They think life is:Only about themWhat they want is right, regardlessThey decide what they should doThey can do whatever they want, because they don’t have to account to anyoneThe reality is different

12 Reality 2. Life is About OthersThoughtful consideration causes us to think:Who created us?Who loves us the most?What is our purpose here on earth?Where do we find the most joy?And when we think longer-termWho forgives our sins?Who allows us to live eternally with our families?Who will judge us at the last day?

13 Life is About Others (continued)The more we think, the more we realized that this life is not about us, its about what we do with our lifeLife is a test, training, or probationary time to show where our heart and our will really are (Alma 42:4)13

14 Myth 3. It’s All About MoneySome feel personal finance is all about moneyMoney is the answer to all our problemsWe just don’t have enough of itSomeone commented:If you can solve it with money, it is not a problemThe Reality is different14

15 Reality 3. It's About FaithPersonal finance is not about moneyIts about what the Lord trying to teach us about life and ourselves through personal financeWhat lessons can the Lord teach us from personal finance?The “spiritual and physical” creationPrioritizationDeferring our wantsGiving and sharing with others15

16 It's About Faith (continued)In most cases, financial problems are behavioral problems, not money problemsWe all know what we should do: live on a budget, spend less than we earn, not go into debt, build a reserve, etc.But other things (ignorance, carelessness, compulsiveness, pride, and necessity) get in the wayFor most, it is not a question of knowledge, but of motivation16

17 It's About Faith (continued)How do we motivate ourselves and others?Elder Boyd K. Packer answered this when he said:True doctrine, understood, changes attitudes and behavior. The study of the doctrines of the gospel will improve behavior quicker than a study of behavior will improve behavior (Boyd K. Packer, “Little Children,” Ensign, Nov. 1986, 16).17

18 It's About Faith (continued)The lesson for us then is to understand doctrineThe “doctrine” is we have been commanded in the scriptures and by living prophets to:Live within our meansGet out of debtBuild a reserveSave for long-term goalsTeach our childrenFrom this perspective, we see that financial problems are not necessarily problems of money, but problems of faith18

19 It's About Faith (continued)2. It’s about freedomPresident Ezra Taft Benson said:The Lord desires his Saints to be free and independent in the critical days ahead. But no man is truly free who is in financial bondage (“Prepare Ye,” Ensign, Jan. 1974, p. 69).Obedience to the commandments (which includes the commandment to get and stay out of debt) are critical parts to this freedom promisedAnd ye shall know the truth, and the truth shall make you free (John 8:32).19

20 It's About Faith (continued)3. It’s about happinessHappiness is not dependent on the amount of money we earnRather, it comes from doing the things that we know are right. The prophet Alma wrote:Behold, I say unto you, wickedness never was happiness (Alma 41:10).20

21 Myth 4: It’s All MineSome believe the oft-quoted statement “it’s all mine”They think they own:Their belongingsTheir education they gainedTheir money, savings and investmentsThey earned these things through their hard work, intellect, effort, sweat, tears, luck and the time they spentThe reality is differentDo you remember the cause of the downfall of the peoples in the Book of Mormon?What did it start with?It started with pride from their blessingsWhat was the “cycle of destruction?”Blessings led to pridePride led to wickednessWickedness led to destructionDestruction led to humilityHumility led to blessings21

22 Reality 4. I Am a Steward1. Ownership: Everything we have is the Lord’sThe Psalmist wrote:The earth is the Lord’s, and the fullness thereof; the world, and they that dwell therein (Psalms 24:1).The Lord is the creator of the earth (Mosiah 2:21), the creator of men and all things (D&C 93:10), the supplier of our breath (2 Nephi 9:26), the giver of our knowledge (Moses 7:32), the provider of our life (Mosiah 2:22), and the giver all we have and are (Mosiah 2:21).22

23 I Am a Steward (continued)2. Stewardship: We are stewards over all that the Lord has, is, or will share with usThe Lord said:Thou shalt be diligent in preserving what thou hast, that thou mayest be a wise steward; for it is the free gift of the Lord thy God, and thou art his steward (D&C 136:27).23

24 I Am a Steward (continued)3. Agency: The gift of “choice” is man’s most precious inheritancePresident David O. McKay wrote:Next to the bestowal of life itself, the right to direct that life is God’s greatest gift to man.… Freedom of choice is more to be treasured than any possession earth can give (Conference Report, Apr. 1950, p. 32; italics added).24

25 I Am a Steward (continued)4. Accountability: We are accountable for every choice we makeThe Lord stated:For it is required of the Lord, at the hand of every steward, to render an account of his stewardship, both in time and in eternity (D&C 72:3).25

26 I Am a Steward (continued)On the questions of what is really ours, Elder Neal A. Maxwell stated:The submission of one’s will is really the only uniquely personal thing we have to place on God’s altar. The many other things we “give,” brothers and sisters, are actually the things He has already given or loaned to us. However, when you and I finally submit ourselves, by letting our individual wills be swallowed up in God’s will, then we are really giving something to Him! It is the only possession which is truly ours to give! (italics added, “Swallowed Up in the Will of the Father,” Ensign, Nov. 1995, 22).26

27 Myth 5. Finances are a Temporal MatterMany think money matters are only temporal mattersThey feel that how we manage their money has nothing to do with their spirituality.They feel that scriptures talk only of spiritual things and not temporal issues such as financial matters.Those are left up to themThe reality is different!27

28 Reality 5. Finances are a Spiritual MatterMoney matters are spiritual matters because:1. All things are spiritualThe Lord said, “All things unto me are spiritual, and not at any time have I given unto you a law which was temporal” (D&C 29:34)The Apostle Paul taught that the love of money is evil, not money itself (1 Timothy 6:10).28

29 Finances are a Spiritual Matter (continued)2. Money is a medium of exchangeElder Sterling W. Sill said:We can build temples with money, we can send out missionaries with money, we can erect educational institutions, operate hospitals, and pay our tithing with money. … In many ways we can build up the kingdom of God with money (Sterling W. Sill, “A Fortune to Share,” Ensign, Jan. 1974, 60).29

30 Finances are a Spiritual Matter (continued)3. There is no true freedom without financial freedomPresident Ezra Taft Benson said:The Lord desires his Saints to be free and independent in the critical days ahead. But no man is truly free who is in financial bondage (“Prepare Ye,” Ensign, Jan. 1974, p. 69).30

31 Finances are a Spiritual Matter (continued)4. Money is a tool to teach gospel principlesMoney is a tool to teach us many things, including the gospel principles of sacrifice, discipline, law of the harvest, and workMoney teaches and reinforces both the spiritual and physical creation, as we develop goals and budgets and work toward themMoney teaches the Law of the Harvest, as we invest for retirement and other goals31

32 Myth 6. Finance is a Man’s ResponsibilitySome think money matters are a priesthood responsibility for married couplesThey think if wives become knowledgeable about financial matters, their husbands will be upsetThey reason that since the husband makes the money, husbands get to decide where it goes (This is known as unrighteous dominion)The reality is different!32

33 Reality 6. Finances are a Shared ResponsibilityThe Proclamation on the Family states:By divine design, fathers are to preside over their families in love and righteousness and are responsible to provide the necessities of life and protection for their families. Mothers are primarily responsible for the nurture of their children. In these sacred responsibilities, fathers and mothers are obligated to help one another as equal partners (Proclamation on the Family, 1995).33

34 A Shared Responsibility (continued)Marvin J. Ashton counseled:Management of family finances should be mutual between husband and wife in an attitude of openness and trust. Control of the money by one spouse as a source of power and authority causes inequality in the marriage and is inappropriate. Conversely, if a marriage partner voluntarily removes himself or herself entirely from family financial management, that is an abdication of necessary responsibility (italics added, Marvin J. Ashton, “Guide to Family Finance,” Liahona, Apr. 2000, 42).34

35 Myth 7. Credit Card, Auto and Consumer Debt is OKSome consider it is OK for us to go into debt for things, especially things they really wantWe can’t have a car without a car payment, can we?It helps build our credit score—doesn’t it?The reality is different!35

36 Reality 7. Debt is Dumb and Slows GrowthConsumer debt slows growth, savings, and is expensive, both economically and spirituallyPresident James E. Faust stated:Over the years the wise counsel of our leaders has been to avoid debt except for the purchase of a home or to pay for an education. I have not heard any of the prophets change this counsel (“Doing the Best Things in the Worst Times,” Ensign, Aug. 1984, 41).Sadly, consumer, auto, and credit card debt not paid off monthly are not included in that short list of acceptable debt36

37 Debt is Dumb (continued)President Ezra Taft Benson said:Pride is a sin that can readily be seen in others but is rarely admitted in ourselves. . . It is manifest in so many ways, such as living beyond our means (italics added, Ezra Taft Benson, “The Faces of Pride,” New Era, Oct. 2003, p. 40).Perhaps the debt problem is more a problem of pride than it is of money?37

38 Myth 8: Budgets are for College StudentsSome feel that living on budgets is only for college studentsThose more careful with their money, “mature” people like ourselves, don’t need to have a budgetThey know where their money goes (it goes to pay their bills)The reality is different!38

39 Reality 8. Every Family Should have a BudgetPresident Spencer W. Kimball counseled:Every family should have a budget. Why, we would not think of going one day without a budget in this Church or our businesses. We have to know approximately what we may receive, and we certainly must know what we are going to spend. And one of the successes of the Church would have to be that the Brethren watch these things very carefully, and we do not spend that which we do not have (Conference Report, April 1975, pp ).39

40 Every Family Should Have a Budget (continued)What is a Budget?It is the single most important tool in helping us attain our personal goals. It is a tool—just like a hammer or a nailIt is the process of planning our spendingIt’s making sure our resources are used for the things that matter most—our personal goals40

41 Budgeting: The Old Way Personal Goals Income Tithing ExpensesAvailable for SavingsPersonal Goals41

43 Every Family Should Have a Budget (continued)Elder L. Tom Perry taught this when he said:After paying your tithing of 10 percent to the Lord, you pay yourself a predetermined amount directly into savings. That leaves you a balance of your income to budget for taxes, food, clothing, shelter, transportation, etc. It is amazing to me that so many people work all of their lives for the grocer, the landlord, the power company, the automobile salesman, and the bank, and yet think so little of their own efforts that they pay themselves nothing (L. Tom Perry, “Becoming Self-Reliant,” Ensign, Nov. 1991, 64).43

44 Every Family Should Have a Budget (continued)Elder Marvin J. Ashton stated:Some claim living within a budget takes the fun out of life and is too restrictive. But those who avoid the inconvenience of a budget must suffer the pains of living outside of it. The Church operates within a budget. Successful business functions within a budget. Families free of crushing debt have a budget. Budget guidelines encourage better performance and management (italics added, Marvin J. Ashton, “It’s No Fun Being Poor,” Ensign, Sept. 1982, 72).44

45 Myth 9. I can start getting out of debt and start saving laterSome think they do not need to get their finances in order now because they can always start getting our of debt and saving laterIt is easy to get out of debt so why worry now, orI will start saving when I get the “big bucks” later on, orThere is no possible way that I can begin saving now, so why even tryThe reality is different45

46 Reality 9. We must start saving nowIf you want to get out of debt, have an adequate retirement, and save for education and missions for yourself and children, you must start now!You must think long-term now (D&C 43:34)You cannot put it off savingTime value of money takes just that--timeThe Law of the Harvest is still in effect

47 Myth 10. I Pay my Tithing, I Have Nothing to Worry About FinanciallyThe prophet Malachi said:Bring ye all the tithes into the storehouse, and prove me now herewith, saith the Lord of hosts, if I will not open you the windows of heaven (Malachi 3:10, 3 Nephi 24:10).Doesn’t it say that if they pay their tithing, the windows of heaven will open and they will get all the financial blessings they need, regardless of any learning, thought, application, hard work or effort on their part?The reality is different!47

48 Reality 10. We Must Learn To Be Financially WiseThe prophet Malachi promised that God will open the windows of heavenHowever, there is no promise that the windows of heaven will be financial blessings or that paying tithing will eliminate all our financial problemsWe still are stewards over what we have and are, and must learn to live in this increasingly challenging financial worldWe have been commanded to be wise: “Oh be wise, what can I say more” (Jacob 6:12)48

49 We Must Learn to Be Wise (continued)Interesting statistics:Average per household debt in the U.S. is $14,500 excluding mortgage debt in 2007Credit card users pay 12-20% more than cash users40% of American families spend more than they earnThe typical family pays $1,200 per year in interestAbout 60% of all active credit card accounts are not paid off monthlyMost couples indicate that finances are a major stress on their marriagesSource: available upon request49

50 We Must Learn to Be Wise (continued)How do to you learn to be wise financially?There are many sources of good informationIt just takes time to sort them outLet me add two other sources to your list:1. The LDS Provident Living Websitethen Family Finances2. The BYU Marriott School of Management’s Personal Finance website50

56 B. Understand What Wise Stewards KnowAs I have taught classes in personal finance for over fifteen years, there has come a realization that certain principles are critical in the development of good financial habitsFollowing are the 10 critical habits that I believe wise men and women should develop about personal finance as they strive to:Follow our SaviorKeep His commandments, andLearn the lessons God is trying to teach themServe others, andStand in holy places56

57 Wise Stewards Know (continued)1. Wise stewards recognize their stewardshipThey understand the principles of:Ownership: everything they have is the Lord’sStewardship: they are stewards over all God has blessed them withAgency: the gift of choice is one of God’s greatest gifts to usAccountability: they will be held accountable for all their choices, including their financial choicesThey recognize that nothing they have is their own—it is all God’sThen they act accordingly57

58 Wise Stewards Know (continued)2. Wise stewards have their priorities in orderThey seek first the kingdom of God and His righteousness (Matt. 6:33)They know the best things in life are free: families, relationships, and the gospel of Christ.Their first goal in life is not wealth, power, or gratification, but eternal life with their familiesThey seek the true riches first—the kingdom of God and the gift of eternal lifeThen they seek the other riches, if they desire, but it is for the intent to do good—to help and bless their families and others (Jacob 2:18-19)58

59 Wise Stewards Know (continued)3. Wise stewards plan their future early and live their plan (both financial and non financial)They follow President Ezra Taft Benson’s counsel when he said: “Plan your financial future early, then live your plan” (Ezra Taft Benson, “To the Elderly in the Church,” Ensign, Nov 1989, 4).They prayerfully establish their goals, live worthy of the Spirit, and with His help achieve their goalsThey seek God’s help in all aspects of their livesThis includes planning, setting and achieving goals, budgeting, avoiding debt, building a reserve, and saving for retirement and education59

60 Wise Stewards Know (continued)4. Wise stewards know it is what they “become” that is most importantThey know that money is a tool to teach principles and to help them become more like the SaviorThey realize it is not what they “earn”, but what they “save”, that helps them acquire wealthBut more importantly, they know that its not what they “save”, but what they “become,” that makes them more like their SaviorThey know that money is only a tool, but an important one, in helping them to learn important lessons in life to help them become more like their Savior Jesus Christ60

61 Wise Stewards Know (continued)5. Wise stewards know money cannot buy happinessThey know that money can do. It can eliminate a lot of financial and other problems in life and provide security for them and their familiesBut they know it cannot “buy” them happiness. They must find happiness on their ownThey use money to reduce their financial difficulties, be secure in their families, and to bless the lives of othersThen they find happiness in the gospel of Jesus Christ, their families, and serving others61

62 Wise Stewards Know (continued)6. Wise stewards understand assets and liabilitiesAssets are things that have value. They are either income-generating (investments, savings, rentals, etc.) or income-consuming (cars, toys, houses, etc.)They know their choice of assets will largely determine how they will live their livesLiabilities are things they have borrowed forExcept for an education and a modest home, liabilities should be eliminatedThey maximize income-generating assets, minimize income-consuming assets, and eliminate liabilities62

63 Wise Stewards Know (continued)7. Wise stewards understand incomeThey understand the different types of incomeEarned income is income from their jobPassive income is income from investments, generally businesses or real estate. They generally need to do less work to earn this incomePortfolio income is income from financial investments. They do not need to do any work to earn income from these investmentsThey realize that the best income is not earned income, but portfolio and passive income63

64 Wise Stewards Know (continued)8. Wise stewards know they are responsibleYou were given two great gifts: your mind and your time. It is up to you to do what you please with both. With each dollar bill that enters your hand, you and only you have the power to determine your destiny. Spend it foolishly, you choose to be poor. Spend it on liabilities, you join the middle class. Invest it in your mind and learn how to acquire assets and you will be choosing wealth as your goal and your future. The choice is yours and only yours. Every day with every dollar, you decided to be rich, poor, or middle class (Robert Kiyosaki and Sharon Lechter, Rich Dad Poor Dad, Time Warner Book Group, USA, 1998, p. 197).They choose the harder path of personal responsibility64

65 Wise Stewards Know (continued)9. Wise stewards know they make a living by what they earn, but a life by what they giveThey know that life is not measured by what they have or earn, but what they giveThey know there is more to life than money-- they learn to give more“For what shall it profit a man, if he shall gain the whole world, and lose his soul?” (Mark 8:36).They follow the example of the greatest example and giver of all time, even their Savior Jesus Christ65

66 Wise Stewards Know (continued)10. Wise stewards remember the “ifs”Wise stewards remember three critical thingsThese are not just the things they must know, but things they must do!66

67 Wise Stewards Know (continued)1. The scriptures make us wise if we learn to read them and obey the commandmentsIt is not enough to read the scriptures—we must obey the commandmentsO remember, my son, and learn wisdom in thy youth; yea, learn in thy youth to keep the commandments of God (Alma 37:35).

68 Wise Stewards Know (continued)2. The Savior makes us holy if we repentIt is not enough to have a Savior—we must repent and take advantage of His atonement For, behold, the Lord your Redeemer suffered death in the flesh; wherefore he suffered the pain of all men, that all men might repent and come unto him. And he hath risen again from the dead, that he might bring all men unto him, on conditions of repentance (D&C 18:11-12).68

69 Wise Stewards Know (continued)3. The storms make us strong if we learn the lessons God wants us to learnIt is not enough to have a storm—we must learn from themNevertheless, thou knowest the greatness of God; and he shall consecrate thine afflictions for thy gain (2 Nephi 2:2).And if men come unto me I will show unto them their weakness. I give unto men weakness that they may be humble; and my grace is sufficient for all men that humble themselves before me; for if they humble themselves before me, and have faith in me, then will I make weak things become strong unto them (Ether 12:27).69

70 Wise Stewards Know (continued)The Brother of Jared knew about stormsWhen the brother of Jared came to the ocean on his way to the “promised land,” he had two problems, light and navigation. The Lord helped the brother of Jared with both problemsThe Lord touched the stones, which gave lightHe will help and give us “light” as wellThe Lord sent the storms, to blow Jared and his family toward the “promised land”The storms which He sends to us (like we have today) will take us where He wants us to be so we can return and be with Him70

71 Wise Stewards Know (continued)The Lord is in our stormsHe is trying to teach us those things which will take us to our “promised land,” to return to His presenceIf we learn the lessons He is trying to teach us, we will become stronger, more valiant in the testimony of Christ, more willing and able to serve, and more ready for the next stormIf we fail to learn the lessons from the storm, then the Lord will need to teach us these lessons some other wayIt may take more and even more severe storms until we learn what we need71

72 Summary Myth 1. The gospel is hard and expensiveReality: Life is hard, but the gospel makes it easierMyth 2. Life revolves around meReality: Life is about othersMyth 3. It’s all mineReality: We are stewardsMyth 4. It’s about moneyReality: Its about faith, freedom and happinessMyth 5. Financial matters are a temporal matterReality: Financial matters are spiritual mattersMyth 6. Finance is a man’s responsibilityReality: Finance is a shared responsibility72

73 Summary (continued) Myth 7. Credit card, auto, and consumer debt is OKReality: Debt is dumb and slows growthMyth 8. Only college students need to have a budgetReality: Every family should have a budgetMyth 9. I can start later to get out of debt and begin savingReality: We need to start nowMyth 10. I pay my tithing, I have nothing to worry about financiallyReality: We need to learn to be financially wise. There are good resources available that can help73

74 Summary (continued) Wise stewards develop good financial habits:1. They recognize their stewardship2. They have their priorities in order3. They plan their future early and live their plan4. They know it is what they “become” that is most important5. they know money cannot buy happiness74

75 Summary (continued) Good habits (continued)6. They understand assets and liabilities7. They understand income8. They know they are responsible9. They know they make a living by what they earn, but a life by what they give10. They remember the three critical “ifs”The scriptures make us wise, if . . .The Savior makes us holy, if . . .The storms make us strong, if . . .75

76 Summary (continued)Though times may be tough, we believe a prophet who said:I testify to you that our promised blessings are beyond measure. Though the storm clouds may gather, though the rains may pour down upon us, our knowledge of the gospel and our love of our Heavenly Father and of our Savior will comfort and sustain us and bring joy to our hearts as we walk uprightly and keep the commandments. There will be nothing in this world that can defeat us. My beloved brothers and sisters, fear not. Be of good cheer. The future is as bright as your faith (italics added, Thomas S. Monson, “Be of Good Cheer,” Ensign, May 2009, 92).76

77 Summary (continued)Wise stewards also know that if they continually strive to obey the Lord’s commandments and seek to be like their Savior Jesus Christ, they will come to know, in spite of all the storms, that:For verily, I say unto you, that great things await you (D&C 45:62).For great things truly await you as you continue to live, obey, and enjoy the wonderful the gospel of Jesus Christ!77